Stocks Up Sharply On Friday, Pacing Higher For The Month  Image: Bigstock Stocks closed sharply higher on Friday, but just missed the mark for the week. Although, stocks are tracking higher for the month so far, with all of the major indexes up by more than 1%. Friday's better than expected retail sales numbers, which showed m/m sales up 1.0% vs. estimates for 0.9% (ex-vehicles was up 1.0% vs. views for 0.6%; ex-vehicles & gas was up 0.7% vs. views for -0.2%), showed the resilience of the consumer and helped spark Friday's rally. More good news from the Empire State Manufacturing Index which came in at 11.1 vs. last month's -1.2 and the consensus for -1.3, also added to the rally. Industrial Production slipped a bit, ticking down -0.2% m/m vs. estimates for 0.1%. Same for Manufacturing Output, which was down -0.5% vs. the consensus for 0.2%. The Capacity Utilization Rate, which came in at 80.0%, just missed their estimate of 80.4%. But they beat last month's previously reported 79.0% (although, that was upwardly revised to 80.3% this time around). But Business Inventories rose 1.4% m/m vs. last month's upwardly revised 1.3% and views for 1.2%. And Consumer Sentiment came in better than expected as well at 51.1 vs. last month's 50.0 and views for th e same. We also saw plenty of positive earnings surprises on Friday, particularly from the big banks with Citigroup leading the way with a 37.7% positive EPS surprise. We also saw positive surprises from U.S. Bancorp with 1.87%, PNC Financial with 9.97%, The Bank of New York Mellon with 2.68%, and State Street with 10.23%. BlackRock and Wells Fargo missed with -7.30% and -3.90% respectively, but both saw their stocks rise on Friday by 1.99% and 6.17%. Earnings season continues this week with another 331 companies set to report. And then another 1,014 companies on deck for next week. And 1,911 the week after that. But the event everybody is really waiting for is next week's FOMC Announcement where we'll hear how high the Fed raises interest rates. After last week's hotter than expected inflation report, 55% believe the Fed will raise rates by 75 basis points (just like the last time), while roughly 44% now believe the Fed could go as high as 100 basis points (a full percentage point), when their 2-day FOMC meeting concludes on Wednesday, July 27th. Last month's lows continue to hold. That makes it four weeks and counting. And since stocks typically go up during earnings season, there's a high likelihood that streak could extend to five weeks this week. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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